Jack In The Box 2015 Annual Report Download - page 17

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• our ability to withstand competitive pressures may be decreased; and
• our level of indebtedness may make us more vulnerable to economic downturns and reduce our flexibility in responding to changing business,
regulatory and economic conditions.
Our ability to repay expected borrowings under our credit facility and to meet our other debt or contractual obligations (including compliance with
applicable financial covenants) will depend upon our future performance and our cash flows from operations, both of which are subject to prevailing
economic conditions and financial, business and other known and unknown risks and uncertainties, certain of which are beyond our control. In addition, to
the extent that banks in our revolving credit facility become insolvent, our ability to borrow to the full level of our facility could be limited.
Risks of Market Volatility. Many factors affect the trading price of our stock, including factors over which we have no control, such as reports on the
economy or the price of commodities, as well as negative or positive announcements by competitors, regardless of whether the report relates directly to our
business. In addition to investor expectations about our prospects, trading activity in our stock can reflect the portfolio strategies and investment allocation
changes of institutional holders and non-operating initiatives such as a share repurchase program. Any failure to meet market expectations whether for sales,
growth rates, refranchising goals, earnings per share or other metrics could cause our share price to drop.
Risks of Changes in Accounting Policies and Assumptions. Changes in accounting standards, policies or related interpretations by accountants or
regulatory entities may negatively impact our results. Many accounting standards require management to make subjective assumptions and estimates, such as
those required for long-lived assets, retirement benefits, self-insurance, restaurant closing costs, share-based compensation, goodwill and other intangibles,
legal accruals, and income taxes. Changes in those underlying assumptions and estimates could significantly change our results.
Litigation. We are subject to complaints or litigation brought by former, current or prospective employees, customers, franchisees, vendors, landlords,
shareholders or others. We assess contingencies to determine the degree of probability and range of possible loss for potential accrual in our financial
statements. An estimated loss contingency is accrued if it is probable that a liability has been incurred and the amount of loss can be reasonably estimated.
Because lawsuits are inherently unpredictable and unfavorable resolutions could occur, assessing contingencies is highly subjective and requires judgments
about future events. We regularly review contingencies to determine the adequacy of the accruals and related disclosures. However, the amount of ultimate
loss may differ from these estimates. A judgment that is not covered by insurance or that is significantly in excess of our insurance coverage for any claims
could materially adversely affect our financial condition or results of operations. In addition, regardless of whether any claims against us are valid or whether
we are found to be liable, claims may be expensive to defend, and may divert management’s attention away from operations and hurt our performance.
Further, adverse publicity resulting from claims may harm our business or that of our franchisees.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
The following table sets forth information regarding our operating Jack in the Box and Qdoba restaurant properties as of September 27, 2015:




Company-owned restaurant buildings:
On company-owned land
41
184
225
On leased land
134
505
639
Subtotal
175
689
864
Company-leased restaurant buildings on leased land
560
929
1,489
Franchise directly-owned or directly-leased restaurant buildings
—
557
557
Total restaurant buildings
735
2,175
2,910
15